All Forum Posts by: Account Closed

Thanks Mike! If my efforts are successful I will shoot you a note to see if you can pass notes to your builder contacts to determine interest. My business plan is not all the complicated. Build my custom home as a personal residence and continue to prospect lots as if I had never found my ideal site. I am living in the tear-down during the planning and design phase of the build. Being new to the neighborhood, you would be amazed at how much information neighbors provide (who's retiring to florida soon, who's renting, who might sell, etc)

Birmingham; central lincoln, quarton lakes and holy name. There are a handful of builders working the same angle-- convincing grandma to sell her small bungalow after 20 years. It took me a full year to find the perfect building site and I learned a ton about prospecting this niche market. Looking for pocket listings and landlords who would consider selling. MLS is not fruitful- inventory is low on these tear-downs and demand is high. Hard to find cheap dirt.

Actually that 40-80 percent was cumulative I just noticed. But expect 50 percent next year and a gradual normalization in the future (less than 20 percent annual inflation).

The corporate economics group at my company forecasts inflation in Argentina of roughly 40-80 percent for the forward looking 5 year horizon. They are Ivy league PHD's in econ so I have to believe they have the best estimate available. That being said, if you can price for this inflation in the form of rent increases in the coming years I would say go for it. If not, stay away-- your cash flow from this rental or equity is worth less and less in real Arentine peso's each year. Crunch your numbers again but use more worst case scenarios regarding inflation.

I added a bit of texture in my profile on goals. I spent a full year chasing after buildable lots in a suburb of Detroit and learned a ton along the way. Enough to be confident I have some good market intelligence I should try and leverage! I am starting out by building a custom home on a building site I purchased and hope to repeat the process every several years for tax-free gains. There is a lot of investment going on in my area; building sites all over the place. I was hoping to develop a marketing campaign and yellow letter mailers to target tear-down homes in my neighborhood and wholesale to builders looking for lots to spec build. I came across at least 3-4 building sites along my way I could have put under contract, but the sites were too big for the custom home in our budget. I could have easily wholesaled them had I known the possibilities! I am just a beginner and hope to learn from other forum members.

Ah I see. It makes sense that you are concerned about documentation. If you are just transferring title from a property personally held to an LLC I think whatever title documents show conveyance and perfecting the LLC's security interest in the property would be sufficient. I haven't heard of any requirements for meeting minutes but don't have any experience in that type of transaction.

I agree a single member LLC does not operate much differently than a sole proprietor business. My thoughts coming from a non-attorney; an LLC will not protect you from any professional negligence or tortious claims, but may protect you from certain liabilities that could arise from owning property with tenants.

I would get advice from an active CPA in this space on transferring property to an LLC-- you wouldn't want to trigger any tax obligations, and you definitely want to document as necessary. As far as business formation, you could spend countless hours researching the correct legal structure. One of the more interesting articles I have read originating from BP lately can be found here- http://www.johntreed.com/entity.html

$.02 I have worked in commercial brokerage and started a mortgage brokerage firm in college during boom years. So I have the ability to compare and contrast based on experience. Commercial versus Residential- clearly more money in commercial given the commission structure; you are paid for an entire lease term. In office and industrial this can be very lucrative-- even in retail for big anchor tenants. A very tough racket though; you might find it easier to string together a series of smaller residential deals. And maybe would sleep better at night knowing the risk of deals blowing up is spread across multiple residential contracts and not a couple large commercial deals. Mortgage banking- when I think about the current interest rate environment and regulations I cant help but think this industry is dead for aspiring six figure wage earners. As the fed continues to scale back their quantitative easing and bond-buying program, the ten year treasury will continue to rise (the 30 year fixed tracks this index nicely). Fed funds rate will rise slowly too--reserve meeting minutes suggest Q3 2016. This is all bad for 30 year fixed rate mortgages. It would be difficult for mortgage bankers to develop a large and profitable book of business relying only on purchase financing and not on refinancing.

I stumbled onto BP about a week ago researching business entity formation and haven’t left since! After all the technical readings in my initial search, I realized hearing experiences from forum members and reading articles, listening to podcasts, and reading blog posts proved more valuable than reading any technical literature.
What a great place to learn, develop, and participate in a community of like-minded individuals with similar goals. I am looking forward to contributing as a new member!
Mark

What type of record keeping do you need? A single member LLC is a disregarded entity for tax purposes and is a pass-through entity. Keep records of deductible expenses in the same manner you would for personal itemized deductions; there is no extra hurdle for keeping records of an LLC.